Developments in the Defect of Coercion in Civil Law (A Comparative Study)

Abstract

: Contemporary economic and social developments, alongside evolving legal doctrines, have increasingly required limitations on the principle of freedom of contract. Legislative and judicial interventions now play a vital role in preserving the financial balance of agreements, particularly where unfair contractual terms arise from the exploitation of a party’s informational disadvantage and economic dependency. Such exploitation undermines genuine consent, impairing free will, and may compel the weaker party to conclude agreements or accept terms they would otherwise reject. Conventional defects of consent have proven inadequate in safeguarding the reciprocal economic positions of contracting parties. In response, courts have recognized the need to address the shortcomings of traditional contract theory in maintaining performance and financial equilibrium. This has led to the judicial development of remedies for situations in which one party exploits the other’s economic dependency — a practice widely referred to as economic duress. Recent legislative reforms have sought to codify protections against such exploitation by recognizing economic duress as an independent defect of consent. The aim is to prevent dominant parties from misusing their economic position to the detriment of dependent counterparts, thereby strengthening contractual fairness and equity. This study is divided into two main parts. The first defines duress, its forms, and its constituent elements under both statutory law and Islamic jurisprudence. The second examines the conditions and legal consequences of duress in both systems. The findings indicate that economic duress is established where three factors are present: (1) the coerced party faces economic necessity; (2) the contract’s financial and economic equilibrium is disrupted; and (3) economic influence is misused to create fear and compel agreement. As such, economic duress is an objective defect in contract formation, grounded in financial imbalance rather than purely subjective will. A key recommendation is for the Iraqi legislator to expressly regulate economic duress as a distinct and modern category of coercion — one shaped by current domestic and international economic realities.